GLP IPO Update

SINGAPORE - Global Logistic Properties (GLP), the overseas warehousing unit of the Government of Singapore Investment Corp (GIC), yesterday launched its initial public offering (IPO) at $1.96 a share to raise as much as $3.9 billion.

GLP is looking to raise $3.4 billion but the amount raised from the share sale may increase to as much as $3.9 billion if its over-allotment option is fully exercised. This will make GLP the biggest IPO since SingTel's $4 billion offering in 1993.

GLP has been growing strongly in China and Japan - the world's second and third-largest economies, respectively. The company currently owns and leases 296 properties in 122 integrated parks in the two countries.

GLP's gross floor area has grown by 40 per cent annually in Japan and 100 per cent in China over the last five years, as demand for logistics space grows.

"We expect that to continue in the foreseeable future as China focuses on stimulating domestic consumption in the next 10 to 20 years because they cannot rely on exports and capital investment to grow the economy," said GLP chief executive Ming Mei.

GLP added that it would also like to grow into a few other cities in China on top of the 18 where it already has a presence.

"Based on our current plan, with our balance sheet and a low level of debt, our strong cash flow from Japan and China, we don't expect we need capital from public markets in the near term, the next 3 to 4 years," Mr Mei said.

"But again, if our growth prospects happen to be better than we anticipated that would be a good thing for shareholders as well," he added.

The company is offering 1.76 billion shares, with 589 million units going to cornerstone investors. The pricing of $1.96 is at the top end of the IPO's indicated price range following a successful global book building exercise.

The company's cornerstone investors - who have committed $1.2 billion - include the Alibaba Group, CB Richard Ellis Global Real Estate Securities, ING Clarion Real Estate Securities, Lion Global Investors, Nan Fung Group, Owl Creek Asset Management, Hong Kong tycoon Cheng Yu-Tong's private investment vehicle Chow Tai Fook and Jovina Investments, which is wholly-owned by Singapore billionaire Peter Lim.

GLP's public offer will close on Thursday at 10am and the shares will commence trading on the Singapore Exchange on Oct 18.

The GIC said it would remain the company's largest single shareholder after the IPO.